Is It Possible to Get a Mortgage After Filing Bankruptcy?
- Author Jennifer Quilter
- Published June 12, 2011
- Word count 507
Yes, it is possible to get a mortgage after filing bankruptcy, but not immediately. It's actually going to be a pretty drawn out process, and how long it takes is going to depend largely on what you do.
Bankruptcy is a clean slate, in a sense. You're ridding yourself of the responsibility of all of your past debts. The problem is, however, that those debts damaged your credit, and now you have this discharge, which is the worst thing you can put on your report. Potential lenders are going to look at you immediately after filing as an unknown--they don't know if you're going to be changing your ways and paying things on time, or staying in the same pattern and situation and get back into debt. It takes time to build up a positive credit history after this, which is why you can't immediately get a home loan.
Most lenders won't consider working with you for two years, and that's okay, because that's how long it's going to take you (at a minimum) to get a decent history built up. If you don't start working on this immediately, it will take even longer, so you want to put some good effort towards your finances right now and try to build up a positive payment history.
When you already have a bad score, this can be difficult. A lot of companies aren't going to want to work with you, but you need to get things like credit cards and loans in order to build up a history of paying them on time each month.
While this is a lot to do and is going to take a lot of effort and time, the important to remember is that until you do all this work it won't be possible to get a home loan. For the first two years no one will even consider you, and if you don't do any work, that can go on for many more years. In order to make it possible to get a mortgage after filing bankruptcy you need to do a lot of work, but this work can be incorporated into your other life plans, and can make doing absolutely everything in your financial life easier as well.
In order to make this all possible you'll need to build up a history of paying on time with both credit card payments and loan payments. Above all else, it's extremely important that you pay on time each month with anything that you get yourself involved in. It can be hard to sign up for new accounts in your post bankruptcy life, but keep in mind that for everything there are usually secured options, meaning the option to offer up collateral. This happens with cell phones, credit cards, loans, and even utility bills. Life will be more expensive for a while, but still workable.
So while it will take a lot more credit building work than it would have otherwise, it is still possible to get a mortgage after bankruptcy, just not immediately.
For more about building credit for a mortgage loan after bankruptcy, making your application stand out, and all of your other questions check out Bankruptcy Mortgage Loan.
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